A great week at the bourses and NIFTY

It was a great week at the bourses and NIFTY made a new lifetime high, while the BSESENSEX was about 250 points away. The BSESENSEX gained 618.47 points or 1.91 per cent to close at 32,432.69 points while NIFTY gained 187.75 points or 1.85 per cent to close at 10,167.45 points. The broader markets saw the BSE100, BSE200 and BSE500 gain 1.75 per cent, 1.69 per cent and 1.67 per cent respectively. BSEMIDCAP gained 0.79 per cent and BSESMALLCAP was up 1.75 per cent.

FM Arun Jaitley (l) talks with IMF Managing Director Christine Lagarde in Washington DC. Pic/AFP

Gainers and losers
The top sectoral gainer was BSETECK up 3.57 per cent, followed by BSEIT 2.53 per cent and BSEBANKEX 1.93 per cent. There were no sectoral losers but the one to gain the least was BSEPOWER up 0.23 per cent. In individual stocks, Bharti Tele gained 11.42 per cent followed by its tower company Infratel, which was up 11.14 per cent. Other gainers were Hindalco 5.80 per cent and Axis Bank 4.72 per cent. The top loser was GAIL down 3.56 per cent followed by ZEE Entertainment 2.45 per cent and ONGC 2.12 per cent. The rupee gained 45 paisa or 0.69 per cent to close at Rs 64.93 to the US Dollar. Dow Jones rose 98.05 points or 0.43 per cent to close at 22,871.22 points.

A primary look
There were two primary offerings during the week gone by. The first was from the power exchange IEX (India Energy Exchange) which had a lot of confusion about investment by FPIs. The anchor allotment made to them had to be cancelled and the same added back to the QIB portion. Simultaneously, the company had to offer an exit route to all investors who wanted to withdraw their application because of this confusion. The issue did get subscribed 2.28 times with QIB portion subscribed 2.56 times, HNI undersubscribed at 0.85 times and retail portion subscribed 2.61 times.

Eye on issues
The second primary issue was the largest issue in 2017, from GIC RE of over 11,300 crore. The issue was subscribed 1.36 times with QIB portion subscribed 2.25 times, HNI undersubscribed at 0.22 times and retail undersubscribed at 0.63 times. The retail portion saw 6.56 lakh application being received which implies an average subscription of 2.6 lots, which is substantially higher than the average of 1.3-1.5 lots in most issues. There is a discount of R 45 for retail investors.

Two to compare
There are two issues which would list in this short week because of the Diwali holidays. The first issue is from Godrej Agrovet which would list on Monday and was subscribed over 95 times. The second issue to list would be MAS Financial Services Limited which was subscribed over 128 times. Both the issues have a similar price with Godrej being at 460 and MAS at Rs 459. Both the issues are expected to list with gains of between 25-30 per cent.

Fund raising time
With the IPO of GIC RE being completed the three insurance IPOs over the last 40 days have garnered about Rs 25,000 of equity. There are two more issues waiting to be launched on the sidelines. The first is the PSU general insurer New India expected in the first fortnight of November. The second is private insurer Reliance General Insurance expected in the second fortnight of November. There would of course be other issues besides the above as it is fund raising time on Dalal Street.

Results are in
Results season has kicked off with a decent set of results from TCS, which beat market expectation but was flat. The other big result was from Reliance Industries which posted a robust set of numbers. To add to its impressive performance was the fact that its telecom venture 'JIO' has broken even at the cash level and made a profit. While a net profit maybe a couple of quarters away, it is an impressive performance no doubt.

Hand it over
Tata Teleservices has sold its telecom business to Airtel, without any losses on the balance sheet. This effectively means that Tata Tele would absorb all the losses and hand over the business to Airtel to be run by that company. This would allow the Tata group to exit this business. In yet another deal Indusind Bank has acquired Bharat Financial Inclusion Ltd in a all share swap deal. For every 1,000 shares of Bharat Financial Inclusion, they would receive 639 shares of Indusind Bank.

Ushering in Samvat
The week ahead has a short trading duration with Thursday and Friday being holidays for Diwali. Thursday would see a 'Muhurat' session in the evening to begin trading for Samvat year 2074. The mood is optimistic, the undertone strong and we seem to be getting ready to head into euphoria. While it may not be the right time to warn people about getting carried away, it makes sense to be cautious. Allow the results to determine the trend, before taking fresh new positions.

Wishing all readers a Happy Diwali and a Prosperous New Year Samvat 2074.

Arun Kejriwal is founder of the Mumbai-based advisory firm Kejriwal Research & Investment Services Pvt Ltd.

Disclaimer: No financial information whatsoever published anywhere in this newspaper should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is for educational and information purposes only.